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China punishes three firms blamed for stock volatility

Fri, Sep 04, 2015 - 2:48 PM

China's market regulator has fined three companies, including Alibaba-linked Hundsun, a combined 453 million yuan (S$100.9 million) for conducting "illegal securities business", which has been blamed for volatility on the plunging markets.

PHOTO: EPA

[SHANGHAI] China's market regulator has fined three companies, including Alibaba-linked Hundsun, a combined 453 million yuan (S$100.9 million) for conducting "illegal securities business", which has been blamed for volatility on the plunging markets.

The moves come as Chinese authorities mount broad attempts to shore up share prices after the benchmark Shanghai index plunged 30 per cent in three weeks from mid-June following a debt-fuelled rally which sent the market up 150 percent in a year.

The continuing falls come alongside worries about slowing growth in the world's second-largest economy that have sent shudders through global bourses.

The China Securities Regulatory Commission (CSRC) also confiscated a total 151 million yuan in "illegal income" from Hangzhou Hundsun Network Technologies Service Co, Mecrt Corp, and Hithink RoyalFlush Information Network Co, it said in a statement.

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The three firms developed systems which enabled investors to trade stocks without giving their real identities, allowing the firms to profit by "knowingly" providing the software to unqualified clients, the CSRC statement said.

Hundsun Technologies closed down 3.14 percent on the Shanghai exchange and Hithink RoyalFlush Information Network gained 2.19 per cent in Shenzhen trading on Wednesday, the last day of trading this week before a market holiday.